[webproducers] Re: Fixed Quote vs. Time & Materials

Answer: If your team wants the work they have to get you those estimates ASAP

In this current economic environment your clients will hate you for the most 
part unless you can hit a fixed budget (depending upon scale and charging extra 
for change orders of course). Even if you give a budget range to a client, one 
might expect that after you start if your specification (or client driven 
changes) increases the scope of the work that you'd tell them right away.

The only five exceptions for time and materials that I can think of might be:

a. The nature of the project itself is one of doing ongoing maintenance work to 
an existing project

b. The application is so mission critical that sticking to a set budget doesn't 
make any sense

c. The project is so small that it doesn't matter

e. You're a body shop and the client is directly supervising your team

f. The client trusts you from previous projects, and you have that sort of 
relationship already in place

Although frankly as an agency I'd always prefer time and materials over fixed 
rate! So yes if your existing client likes that you're set...

 
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----- Original Message ----
From: Matt C <isthisyourhomeworklarry@xxxxxxxxx>
To: webproducers@xxxxxxxxxxxxx
Sent: Saturday, March 28, 2009 9:06:41 PM
Subject: [webproducers] Fixed Quote vs. Time & Materials

I started a new job a few months ago, and have been working with my new 
coworkers to improve the proposal writing process at the company.  

At the last agency I worked at, we typically got estimates for projects from 
freelancers and in-house resources and then created proposals and estimates 
based on those hours (obviously adding Producer and PM time when needed)..

At my new job, the current model seems more like guessing the hours, which 
often seem very low to me, and then providing the client with a range.  The 
proposal states that the cost of the project will be based on whatever amount 
of hours it takes us to complete the project.

One of the key factors at play is trying to get a proposal in the hands of the 
prospect ASAP in order to keep them interested in doing the project.  Getting 
quotes from project resources can slow the process down, but may provide more 
accurate numbers for both parties to work with.

Does anyone have any thoughts on which method to use, or specific situations in 
which to use one method over the other?  



      

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